Hyundai setting up plant - production starts in Q4 2007

South Korea's top automaker, Hyundai Motor Co. announced yesterday that they plan to open a production facility in Thailand. Hyundai Motor (Thailand) will distribute 3 models in Thailand, with production of the Sonata due to start in the 4th quarter of this year.

Hyundai are hoping for a successful re-entry to the Thai market, and it has been 10 years since their last effort in Thailand came to an abrupt end in 1997 during the Thai financial crisis. But the timing of this move isn't fantastic given the political uncertainty in the Country leading up to the elections.

The Sonata, a full-sized sedan, will go up against the Toyota Camry, Honda Accord, and Nissan Teana. But Hyundai can expect to win a few customers. The Sonata with a 2.4 liter four-pot petrol motor is unlikely to be significantly cheaper than the opposition, all of which are available with 2.0 liter options. So why would anyone take a second look at the Sonata?

5-year warranty

The first thing that could be of interest to some is the 5-year, unlimited-km warranty that will likely be offered by Hyundai Thailand in order to build up faith in the brand. This alone could insure a successful launch for Hyundai. But there will be question marks over Hyundai's ability to set up a sufficient service infrastructure, and the first buyers will be brave to invest in a large Korean car.

Hyundai will build the Sonata locally but other models will be imported from Korea in completely built up form. These are likely to include the Santa Fe SUV which is popular in the US, and possibly the 2-door Coupe.

Although Hyundai setting up shop in Thailand is not exactly the most exciting news of 2007, it is encouraging to see yet another manufacturer add its name to the list. And more choice is always a good thing.

How soon Toyota and Honda start offering improved warranties in Thailand depends largely on how much of a dent the Sonata puts in Accord and Camry sales. So I think there is very little chance of that happening.

Not that the Hyundai Sonata is a bad car, and it even looks the part, it is just hard to imagine why someone would choose it ahead of a similarly priced Toyota, Honda or even Nissan. But I'd like to be wrong.

Hyundai Sonata